^My guess is that they have done the math and worked it out based upon many people not making any claims. And if it turns out to be a bad deal for the insurer, they will quickly up the premium for next year.

Quote

I work in a sales division and we were suppose to get quarterly bonuses at the end of July, but payroll made a mistake so they won't be issued until this Friday.

A couple of coworkers started freaking out and even saying horrifying things like, "I just bought $5,000 worth of Loui Vuitton luggage and was counting on that money to pay rent!".

I'm somewhat sympathetic to this one (okay, not the item bought, but the general idea of expecting to be paid precisely when told you will be paid.) I was also supposed to get an extra large check in July that didn't get processed on time due to some bureaucracy. Yes, I can wait until the end of August to see that money (because we only get paid monthly), but it is annoying even though it isn't already spent. Yes, I can move money out of savings to cover everything if a check is short, but I prefer to just be paid when I am supposed to be paid according to the agreement I made with them.

Wow, what a pain. My wife's 401k actually let's them choose a fixed dollar amount per paycheck, which makes the math much easier. I don't know why more places don't offer that - it seems like it would be simpler for everyone.

If I had to guess it's to dumb it down for the end user. When you see a dollar value, you think of all the ways you could have spent it. If you only see a percentage, it's much more abstract. But I want my dollar!

I'm actually in software and this kid fits what we would call a "little-head" (rosh katan, from Hebrew) type. The kind of person who follows an instruction to the letter but refuses to honor the spirit of it. You know, the funny guy who answers "Yes, I do" when you ask him "do you have the time?"

These types usually perform just good enough. You ask the person to fix a bug in the software and they go and fix that bug, AND THAT BUG ONLY. In reality, there are probably more bugs in that particular part of the sotware that anyone who looks closely enough can see and should be able to fix. The best performers either go look for similar bugs in the entire body of code and come up with a fix for all of them or at least fix all similar bugs in the immediate vicinity.

We don't like these "little-head" types. So, no. The guy who answered "ass-tat" doesn't get hired. And in my experience he doesn't have the drive to go start the next Google.

What you're deriding is actually a pretty valuable skill to have in software. Most legacy code is chock full of bugs, maintaining it is a nightmare. Small bugs that aren't causing problem reports from end users aren't problems that need to be fixed. If you're given money to fix an issue, you shouldn't be wasting budget working on other stuff. You should focus only on the issue. Randomly checking through the code as a make work project would get you fired from many places, and is a sign of the worst performers I've worked with. These are the guys who get a 40 hour budget to solve a problem and charge up 300 hours on it.

I'm actually in software and this kid fits what we would call a "little-head" (rosh katan, from Hebrew) type. The kind of person who follows an instruction to the letter but refuses to honor the spirit of it. You know, the funny guy who answers "Yes, I do" when you ask him "do you have the time?"

These types usually perform just good enough. You ask the person to fix a bug in the software and they go and fix that bug, AND THAT BUG ONLY. In reality, there are probably more bugs in that particular part of the sotware that anyone who looks closely enough can see and should be able to fix. The best performers either go look for similar bugs in the entire body of code and come up with a fix for all of them or at least fix all similar bugs in the immediate vicinity.

We don't like these "little-head" types. So, no. The guy who answered "ass-tat" doesn't get hired. And in my experience he doesn't have the drive to go start the next Google.

What you're deriding is actually a pretty valuable skill to have in software. Most legacy code is chock full of bugs, maintaining it is a nightmare. Small bugs that aren't causing problem reports from end users aren't problems that need to be fixed. If you're given money to fix an issue, you shouldn't be wasting budget working on other stuff. You should focus only on the issue. Randomly checking through the code as a make work project would get you fired from many places, and is a sign of the worst performers I've worked with. These are the guys who get a 40 hour budget to solve a problem and charge up 300 hours on it.

I've seen scripts that had not only bugs but actual glaringly obvious syntax errors. When I was young and naive, I fixed one of those syntax errors. I was quite happy with myself until a user told me that the script now did not do any more what it was supposed to. So, yeah, I don't fix shit unless it leads to problems. It's too probable that the fix will just break something else.

I'm actually in software and this kid fits what we would call a "little-head" (rosh katan, from Hebrew) type. The kind of person who follows an instruction to the letter but refuses to honor the spirit of it. You know, the funny guy who answers "Yes, I do" when you ask him "do you have the time?"

These types usually perform just good enough. You ask the person to fix a bug in the software and they go and fix that bug, AND THAT BUG ONLY. In reality, there are probably more bugs in that particular part of the sotware that anyone who looks closely enough can see and should be able to fix. The best performers either go look for similar bugs in the entire body of code and come up with a fix for all of them or at least fix all similar bugs in the immediate vicinity.

We don't like these "little-head" types. So, no. The guy who answered "ass-tat" doesn't get hired. And in my experience he doesn't have the drive to go start the next Google.

What you're deriding is actually a pretty valuable skill to have in software. Most legacy code is chock full of bugs, maintaining it is a nightmare. Small bugs that aren't causing problem reports from end users aren't problems that need to be fixed. If you're given money to fix an issue, you shouldn't be wasting budget working on other stuff. You should focus only on the issue. Randomly checking through the code as a make work project would get you fired from many places, and is a sign of the worst performers I've worked with. These are the guys who get a 40 hour budget to solve a problem and charge up 300 hours on it.

I've seen scripts that had not only bugs but actual glaringly obvious syntax errors. When I was young and naive, I fixed one of those syntax errors. I was quite happy with myself until a user told me that the script now did not do any more what it was supposed to. So, yeah, I don't fix shit unless it leads to problems. It's too probable that the fix will just break something else.

+ 1 for the last two responses. There are few things more annoying at work than a "do-gooder" coder who decides that his/her interpretation of what some legacy piece of code SHOULD be doing must be correct and reworks it, only to mistakenly alter the functionality. A close second are the ones who constantly want to refactor perfectly functional and tested code because the old code isn't in the latest flavor-of-the-week framework. Both are complete wastes of time and money.

Even if I found their comment humorous, I still wouldn't hire anyone who told me about their ass-tat while I was interviewing them. As others have pointed out, if they can't behave in a very structured formal setting such as a job interview, how can I trust their judgment when they are talking to clients or even their co-workers. It's an HR nightmare waiting to happen. Maybe someone that 'free spirited' would fit in at a startup where HR is just some imaginary thing that they are sure they don't need, but not in a Fortune 100 company where HR is vigilant due to fear of lawsuits.

I'm actually in software and this kid fits what we would call a "little-head" (rosh katan, from Hebrew) type. The kind of person who follows an instruction to the letter but refuses to honor the spirit of it. You know, the funny guy who answers "Yes, I do" when you ask him "do you have the time?"

These types usually perform just good enough. You ask the person to fix a bug in the software and they go and fix that bug, AND THAT BUG ONLY. In reality, there are probably more bugs in that particular part of the sotware that anyone who looks closely enough can see and should be able to fix. The best performers either go look for similar bugs in the entire body of code and come up with a fix for all of them or at least fix all similar bugs in the immediate vicinity.

We don't like these "little-head" types. So, no. The guy who answered "ass-tat" doesn't get hired. And in my experience he doesn't have the drive to go start the next Google.

You got all that from a reported story in which the subject said two words? (if a hyphenated word is two words?). Wow.

I'm actually in software and this kid fits what we would call a "little-head" (rosh katan, from Hebrew) type. The kind of person who follows an instruction to the letter but refuses to honor the spirit of it. You know, the funny guy who answers "Yes, I do" when you ask him "do you have the time?"

These types usually perform just good enough. You ask the person to fix a bug in the software and they go and fix that bug, AND THAT BUG ONLY. In reality, there are probably more bugs in that particular part of the sotware that anyone who looks closely enough can see and should be able to fix. The best performers either go look for similar bugs in the entire body of code and come up with a fix for all of them or at least fix all similar bugs in the immediate vicinity.

We don't like these "little-head" types. So, no. The guy who answered "ass-tat" doesn't get hired. And in my experience he doesn't have the drive to go start the next Google.

You got all that from a reported story in which the subject said two words? (if a hyphenated word is two words?). Wow.

Yeah, the business HR world is full of those snap judgements. Some are valid but way too many are BS. I can trace my decision NOT to get a civilian job during Army retirement transition training. The job interview class gave those "don'ts" ranging from OK to BS. The actual tipping point: "Don't wear loafers to the interview."

Wow, what a pain. My wife's 401k actually let's them choose a fixed dollar amount per paycheck, which makes the math much easier. I don't know why more places don't offer that - it seems like it would be simpler for everyone.

If I had to guess it's to dumb it down for the end user. When you see a dollar value, you think of all the ways you could have spent it. If you only see a percentage, it's much more abstract. But I want my dollar!

Agreed it's dumbed down but think percentage is more common because typically employers match on percentage not $ amount (i.e. employee puts in 5% of pay, employer puts in equivalent of 3.5%). So the percentage makes sense if you're only trying to maximize the employer's match. For most here though we're trying to max total contributions. I know I'd like the option to have a set $ amount withheld.

Wow, what a pain. My wife's 401k actually let's them choose a fixed dollar amount per paycheck, which makes the math much easier. I don't know why more places don't offer that - it seems like it would be simpler for everyone.

If I had to guess it's to dumb it down for the end user. When you see a dollar value, you think of all the ways you could have spent it. If you only see a percentage, it's much more abstract. But I want my dollar!

Agreed it's dumbed down but think percentage is more common because typically employers match on percentage not $ amount (i.e. employee puts in 5% of pay, employer puts in equivalent of 3.5%). So the percentage makes sense if you're only trying to maximize the employer's match. For most here though we're trying to max total contributions. I know I'd like the option to have a set $ amount withheld.

We have Vanguard for our 401(k) and the interface is actually 2 whole-number percentages, one for matched dollars and another for non-matched if you max out the matched percentage. I would think it would be more of a PITA to use actual dollars. First, my company would have to feed Vanguard my projected gross pay daily so they could put the idiot checks on the dollar amount inputs. Second, you'd potentially lose out on some matching if you forgot to update your dollar amount the moment your raise went into effect. Third, what happens if your dollar amount to be withheld exceeds the company's ability to deduct it from your check because you have unpaid sick time or whatever.

We have Vanguard for our 401(k) and the interface is actually 2 whole-number percentages, one for matched dollars and another for non-matched if you max out the matched percentage. I would think it would be more of a PITA to use actual dollars. First, my company would have to feed Vanguard my projected gross pay daily so they could put the idiot checks on the dollar amount inputs. Second, you'd potentially lose out on some matching if you forgot to update your dollar amount the moment your raise went into effect. Third, what happens if your dollar amount to be withheld exceeds the company's ability to deduct it from your check because you have unpaid sick time or whatever.

None of those concerns make any sense. With a flat dollar contribution, if I want to max out the $18k limit I just say take $750 out of each of my 24 paychecks and I never have to think about it again till next year if the limits change, then I recalculate that dollar amount once and I'm done again. If it's a percentage, is that 21% or 22%? It's kind of in between, so I have to do 22% then remember to reduce it at the end of the year to try to get as close to $18k as possible, or talk to HR so they can cut it off manually. Then what happens when you get a raise? You have to recalculate all over again. Flat dollar amount? Raises don't matter. The matching concern I don't get. If the company is going to match 3% they're going to do that wether you're putting in a dollar amount or a percentage amount. Unless like someone said you ONLY want to contribute 3% in order to get the match, and not a penny more. But I doubt there are many here doing that.

We have Vanguard for our 401(k) and the interface is actually 2 whole-number percentages, one for matched dollars and another for non-matched if you max out the matched percentage. I would think it would be more of a PITA to use actual dollars. First, my company would have to feed Vanguard my projected gross pay daily so they could put the idiot checks on the dollar amount inputs. Second, you'd potentially lose out on some matching if you forgot to update your dollar amount the moment your raise went into effect. Third, what happens if your dollar amount to be withheld exceeds the company's ability to deduct it from your check because you have unpaid sick time or whatever.

None of those concerns make any sense. With a flat dollar contribution, if I want to max out the $18k limit I just say take $750 out of each of my 24 paychecks and I never have to think about it again till next year if the limits change, then I recalculate that dollar amount once and I'm done again. If it's a percentage, is that 21% or 22%? It's kind of in between, so I have to do 22% then remember to reduce it at the end of the year to try to get as close to $18k as possible, or talk to HR so they can cut it off manually. Then what happens when you get a raise? You have to recalculate all over again. Flat dollar amount? Raises don't matter. The matching concern I don't get. If the company is going to match 3% they're going to do that wether you're putting in a dollar amount or a percentage amount. Unless like someone said you ONLY want to contribute 3% in order to get the match, and not a penny more. But I doubt there are many here doing that.

Flat dollar makes sense if you're contributing the full $18K. I'm guessing that less than 2% of 401k participants actually do that. Assuming your company does a true-up so you get the full match regardless of how you contribute the $18K over the year, you pick 22% and get a little extra take home on paycheck #24.

Matching matters if you're not contributing over the matching limit percentage. If you make $48K and they match on up to the first 5% of your salary, you would put $100 per paycheck to get the full company match available. If you get a raise to $50K, you would need to change the dollar amount to $104.17 to get the full match.

We've probably thought more about our 401k contributions having this exchange than most plan participants do all year. Percentages are just easier for most participants to deal with.

2 coworkers are house hunting in order to get away from the city. Neither have kids. One is looking at houses about an hour away so her husband can go fishing and shoot targets at home. They are looking for a waterfront acreage.

The other is looking for a hobby farm about 45 minutes in the other direction because she wants to raise chickens.

All I can think is that those are some damned expensive eggs and fish.

Lets say the mortgage goes up by $200,000 and they use a dozen eggs per week...

Of course they may be able to sell excess eggs. If that is the case, they can expect to recoup $3.50 per dozen for farm fresh eggs.

Why would you assume mortgage goes up? Usually when you move further from a city property cost goes down OR you get "more" property for equal cost. Also, if they are buying into an area they plan to retire to...

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"If I could get all the money back I ever spent on cars, I'd spend it on cars." - Nick Mason

Unfortunately, plans are in not required to provide a percentage of contribution that allows employees to reach the IRS limit.

Mine is capped at 40%, which doesn't quite let me contribute as much as I would like to. It's enough to max out the pre-tax limit, but not the post 86 portion. #mustachianProblems

I'd have a hard time getting angry at a 40% limit, but 10 or 15 I'd be raising a stink and possibly asking for a raise to make up for the taxes I have to pay by putting that money in a taxable account instead.

After a month, then make up something really cool you bought with the difference.

Or instead, tell him he could have "x" if he did what you do?

So proud of this CW. He decided to get his masters and one of his first classes was basic accounting. Results are showing already.

Yesterday, he told me he added up his cafe' expenses for the last month ($280) and misc. energy drinks, dip, etc (another $300) and resolved to stop screwing himself. He made his own sandwiches for lunch. :D

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Semi-FIREd December 2017, part-time entrepreneur, lover of puppies and saltwater.

So proud of this CW. He decided to get his masters and one of his first classes was basic accounting. Results are showing already.

Yesterday, he told me he added up his cafe' expenses for the last month ($280) and misc. energy drinks, dip, etc (another $300) and resolved to stop screwing himself. He made his own sandwiches for lunch. :D

Isn't it beautiful to see people suddenly 'getting it'? :D

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Flat dollar makes sense if you're contributing the full $18K. I'm guessing that less than 2% of 401k participants actually do that.

Mine doesn't even allow me to do that. The individual percentage contribution isn't high enough for me, or pretty much anyone, to max out the annual pre-tax.

You aren't able to adjust it? For instance, I could set it to 24% if I wanted to max out my 403b.Doesn't matter that the company mandates 3%- change it.

The max allowable is 10% of gross wages.

Allowable by whom? Even if the web form doesn't go higher, you should be able to have HR manually adjust it.

Some places have problems with failing 401k discrimination testing because the amount that Highly Compensated Employees contribute is higher than the amount that Non-Highly Compensated Employees contribute, beyond some allowable bounds. Some companies limit contributions to reduce the chances of that happening. I've heard of company-set limits that don't allow people to contribute beyond the match, so no more than a couple percent in some cases. There are other ways to fix it. My dad has had some contributions returned to him the last couple of years. Some companies give a fully-vested contribution to NHCEs to close the difference. Certain plan designs give people incentive to contribute enough to close the gap.

Not necessarily what's going on here, but those low limits aren't uncommon.

We have 401k contribution limits at my company (large High-tech). But they are 40% for base contributions plus 40% for catch-up contributions if you qualify. This adds up to 80% of your paycheck that you can potentially contribute pre-tax!

It you do this you would miss out on some of the company match money because it caps out at 6% of your gross salary. But, if you are a short timer or have other reasons for wanting to accelerate your 401k contributions, it is pretty good.

Since I always think in terms of contributing the maximum allowed by law to my 401k I have a different perspective than many regarding matching caps and contribution limits. I don't like either limit. A 6% match cap like mine means that only people grossing over $200K can get a match for all of their 401k contributions (too lazy to do the exact math). Salary caps are bad when they are low (mine isn't) because that can mean that you cannot max out your annual contribution. I would be totally pissed off if my contribution was capped at 10% of my salary like iowajes mentioned.

We have 401k contribution limits at my company (large High-tech). But they are 40% for base contributions plus 40% for catch-up contributions if you qualify. This adds up to 80% of your paycheck that you can potentially contribute pre-tax!

It you do this you would miss out on some of the company match money because it caps out at 6% of your gross salary. But, if you are a short timer or have other reasons for wanting to accelerate your 401k contributions, it is pretty good.

Assuming 40% doesn't reach your max before the end of the year (so what's that under $45k salary?)- how would you miss out on the match? Wouldn't you still get the 6% matched?

Overheard from coworker a day or two ago: I can't buy anything until the end of the year, I've spent so much already, and payday isn't until this Friday!

CW today: I'm trading in my Toyota (a circa 2007 Rav4, nothing wrong with it) for a new Audi! OMG I love them so much!

I'm just sitting here thinking that she's going from one of the most reliable vehicles to one of the least reliable, and if her past money habits continue, she won't have any $ to repair the Audi after warranty expires. There's just no helping some people.

Overheard from coworker a day or two ago: I can't buy anything until the end of the year, I've spent so much already, and payday isn't until this Friday!

CW today: I'm trading in my Toyota (a circa 2007 Rav4, nothing wrong with it) for a new Audi! OMG I love them so much!

I'm just sitting here thinking that she's going from one of the most reliable vehicles to one of the least reliable, and if her past money habits continue, she won't have any $ to repair the Audi after warranty expires. There's just no helping some people.

Too bad, it'd be pretty handy for RE if being unemployed would let you access your 401k.

He might be referring to the hardship withdrawal rules for the 401k. This depends upon the rules of the 401k more than anything, but some form of proof of hardship must be documented to the IRS the following April 15th, and they can disallow it if they don't believe it. Just getting laid off is unlikely to qualify, particularly to an amount that would cover an entire mortgage. It would work if the amount was comparable to the mortgage payment during the time of the layoff, in order to avoid forclosure actions; but like many of the withdrawal penalty exceptions, this one hasn't really be tested in court, so we don't know how far it can be taken before it is disallowed.

He might be referring to the hardship withdrawal rules for the 401k. This depends upon the rules of the 401k more than anything, but some form of proof of hardship must be documented to the IRS the following April 15th, and they can disallow it if they don't believe it. Just getting laid off is unlikely to qualify, particularly to an amount that would cover an entire mortgage. It would work if the amount was comparable to the mortgage payment during the time of the layoff, in order to avoid forclosure actions; but like many of the withdrawal penalty exceptions, this one hasn't really be tested in court, so we don't know how far it can be taken before it is disallowed.

Am I an asshole for hoping nobody points this out, and he does it, and totally screws himself? :P

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Flat dollar makes sense if you're contributing the full $18K. I'm guessing that less than 2% of 401k participants actually do that.

Mine doesn't even allow me to do that. The individual percentage contribution isn't high enough for me, or pretty much anyone, to max out the annual pre-tax.

You aren't able to adjust it? For instance, I could set it to 24% if I wanted to max out my 403b.Doesn't matter that the company mandates 3%- change it.

The max allowable is 10% of gross wages.

Allowable by whom? Even if the web form doesn't go higher, you should be able to have HR manually adjust it.

Some places have problems with failing 401k discrimination testing because the amount that Highly Compensated Employees contribute is higher than the amount that Non-Highly Compensated Employees contribute, beyond some allowable bounds. Some companies limit contributions to reduce the chances of that happening. I've heard of company-set limits that don't allow people to contribute beyond the match, so no more than a couple percent in some cases. There are other ways to fix it. My dad has had some contributions returned to him the last couple of years. Some companies give a fully-vested contribution to NHCEs to close the difference. Certain plan designs give people incentive to contribute enough to close the gap.

Not necessarily what's going on here, but those low limits aren't uncommon.

This might be the root cause, because I'm considered a "highly compensated employee" here.

He might be referring to the hardship withdrawal rules for the 401k. This depends upon the rules of the 401k more than anything, but some form of proof of hardship must be documented to the IRS the following April 15th, and they can disallow it if they don't believe it. Just getting laid off is unlikely to qualify, particularly to an amount that would cover an entire mortgage. It would work if the amount was comparable to the mortgage payment during the time of the layoff, in order to avoid forclosure actions; but like many of the withdrawal penalty exceptions, this one hasn't really be tested in court, so we don't know how far it can be taken before it is disallowed.

Am I an asshole for hoping nobody points this out, and he does it, and totally screws himself? :P

He might be referring to the hardship withdrawal rules for the 401k. This depends upon the rules of the 401k more than anything, but some form of proof of hardship must be documented to the IRS the following April 15th, and they can disallow it if they don't believe it. Just getting laid off is unlikely to qualify, particularly to an amount that would cover an entire mortgage. It would work if the amount was comparable to the mortgage payment during the time of the layoff, in order to avoid forclosure actions; but like many of the withdrawal penalty exceptions, this one hasn't really be tested in court, so we don't know how far it can be taken before it is disallowed.

Am I an asshole for hoping nobody points this out, and he does it, and totally screws himself? :P

Yes, but that is not a reason alone to prevent it.

I've withheld information before, mostly to see what would happen. Living vicariously through others can be just as fun, and a lot easier on the wallet.

Too bad, it'd be pretty handy for RE if being unemployed would let you access your 401k.

He might be referring to the hardship withdrawal rules for the 401k. This depends upon the rules of the 401k more than anything, but some form of proof of hardship must be documented to the IRS the following April 15th, and they can disallow it if they don't believe it. Just getting laid off is unlikely to qualify, particularly to an amount that would cover an entire mortgage. It would work if the amount was comparable to the mortgage payment during the time of the layoff, in order to avoid forclosure actions; but like many of the withdrawal penalty exceptions, this one hasn't really be tested in court, so we don't know how far it can be taken before it is disallowed.

I've withheld information before, mostly to see what would happen. Living vicariously through others can be just as fun, and a lot easier on the wallet.

I've intentionally said very antimustachian things to coworkers just for my own amusement. Nothing about myself, but things that reaffirm their poor choices, e.g. they tell me they live 35 miles away, I say "oh yeah, you can get a lot more house out there!" or they say their BMW's in the shop again and I say "yeah, but it's totally worth it for when it's out, right?" My coworkers are about as antimustachian as they come, so I have fun with it.

Flat dollar makes sense if you're contributing the full $18K. I'm guessing that less than 2% of 401k participants actually do that.

Mine doesn't even allow me to do that. The individual percentage contribution isn't high enough for me, or pretty much anyone, to max out the annual pre-tax.

You aren't able to adjust it? For instance, I could set it to 24% if I wanted to max out my 403b.Doesn't matter that the company mandates 3%- change it.

The max allowable is 10% of gross wages.

Allowable by whom? Even if the web form doesn't go higher, you should be able to have HR manually adjust it.

Some places have problems with failing 401k discrimination testing because the amount that Highly Compensated Employees contribute is higher than the amount that Non-Highly Compensated Employees contribute, beyond some allowable bounds. Some companies limit contributions to reduce the chances of that happening. I've heard of company-set limits that don't allow people to contribute beyond the match, so no more than a couple percent in some cases. There are other ways to fix it. My dad has had some contributions returned to him the last couple of years. Some companies give a fully-vested contribution to NHCEs to close the difference. Certain plan designs give people incentive to contribute enough to close the gap.

Not necessarily what's going on here, but those low limits aren't uncommon.

This might be the root cause, because I'm considered a "highly compensated employee" here.

That's entirely possible.

The highly compensated definition is determined by the IRS.

I got hit by that the first time I sold stock in my old company (stock options). The company, at the time, didn't match. I was then limited to 4% for the next year.

I made sure to schedule my sales after that to all fall in a single year. My salary alone has never been high enough to be an HCE. It was only the stock that put me over.

Eventually that company started matching, which removes the HCE issue.

I got hit by that the first time I sold stock in my old company (stock options). The company, at the time, didn't match. I was then limited to 4% for the next year.

I made sure to schedule my sales after that to all fall in a single year. My salary alone has never been high enough to be an HCE. It was only the stock that put me over.

Eventually that company started matching, which removes the HCE issue.

Matching only helps to a certain extent. Without looking it up again, I don't remember the exactly language, but despite matching, my wife can only contribute up to 10% of gross because she is an HCE. IIRC, it has to do with the amount of employees participating and rate at which they contribute? Maybe that last part is not right though. Hard to remember.

There are a significant number of people to whom "debt free" means no credit cards. Makes me twitchy, I won't consider myself debt free until all debt in both my name and my husband's name is gone! We're working on the last one now, and it's only in his name. But I'm still not debt free.

I wouldn't consider myself "debt free" with a car loan and mortgage, but I do think, especially amongst the Ramsey crowd, that there is a huge tendency to (incorrectly) lump all debt together, no matter the interest rate. Debt over 5% or so is important to pay off ASAP. Debt under that, might as well just carry it to term, it's not really costing you too much to carry it. Especially something like a car loan which is a fixed term, If I'm going to keep my car for 10+ years, does it really matter too much if I retire that 1.9% note in year 3 or year 5, as long as I'm investing?

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"If I could get all the money back I ever spent on cars, I'd spend it on cars." - Nick Mason

I got hit by that the first time I sold stock in my old company (stock options). The company, at the time, didn't match. I was then limited to 4% for the next year.

I made sure to schedule my sales after that to all fall in a single year. My salary alone has never been high enough to be an HCE. It was only the stock that put me over.

Eventually that company started matching, which removes the HCE issue.

Matching only helps to a certain extent. Without looking it up again, I don't remember the exactly language, but despite matching, my wife can only contribute up to 10% of gross because she is an HCE. IIRC, it has to do with the amount of employees participating and rate at which they contribute? Maybe that last part is not right though. Hard to remember.

I have done non-discrim testing for medical benefit plans and cafeteria plans, but have not directly done 401k testing. My best understanding of non-discrimination testing for 401k plans is as follows:

I can't remember if there is a test for amount of employees contributing or not (there is for discrimination testing of some benefits but not others).

Regardless, the most common for the 401k plan to fail are tests that compare the rate of contribution before match and including match). In each case you compare the NHCE average deferral percentage to HCE average deferral percentage. The plan fails the test if:

The HCE definition is selected by the government. An HCE is someone who is a 5% or greater owner in the company or has a salary of $115,000 (number might have changed recently). There is discrimination testing for some health benefits that defines HCEs as anyone in the top 25% of earners in the company, and still others that test for "key employees" who are determined based on ownership and/or whether they are officers at the company.

There are plan designs that help lower the chance of failing the test that don't involve limiting contributions or refunding HCE contributions. For example, matching a decent amount gives NHCEs incentive to contribute. An employer making a separate non-matching contribution might limit non-mustachian HCE deferrals because they may feel they are "saving enough" with the matching. Of course, matching/contributing to 401ks is expensive too.

I wouldn't consider myself "debt free" with a car loan and mortgage, but I do think, especially amongst the Ramsey crowd, that there is a huge tendency to (incorrectly) lump all debt together, no matter the interest rate. Debt over 5% or so is important to pay off ASAP. Debt under that, might as well just carry it to term, it's not really costing you too much to carry it. Especially something like a car loan which is a fixed term, If I'm going to keep my car for 10+ years, does it really matter too much if I retire that 1.9% note in year 3 or year 5, as long as I'm investing?

That's why we still have the debt we do, it's at exactly 5%. So we pay extra, but also invest to the max in the 401-K.

At last, I can contribute to my favourite thread! Overheard this morning:

Co-worker A: what percentage do you contribute to your pension? [we can put in up to 25% of our monthly salary, company matches up to 9%]Co-worker B: Oh, I've never contributed, thinking about pensions is just too morbid!Me: *Choking on my tea*

PS This is after Co-worker B talking about receiving her long service award, meaning she has been here over 15 years...